Steppe Gold shareholders approve Boroo Gold acquisition with 99% support

July 2, 2024, 7:00 AM ET | Source: Steppe Gold Ltd.

Ulaanbaatar, Mongolia–(Newsfile Corp. – July 2, 2024) – Steppe Gold Ltd. (TSX: STGO) (OTCQX: STPGF) (FSE: 2J9) (“Steppe Gold” or “Business“) is pleased to provide an update regarding the pending acquisition of all of the issued and outstanding common shares of Boroo Gold LLC (“Boroo Gold“).

The Company’s shareholders have overwhelmingly approved the acquisition of Boroo Gold pursuant to the share exchange agreement dated April 11, 2024 (the “Share Exchange Agreement“) and the sale of the Tres Cruces Oxide Project to Boroo Singapore, pursuant to the share sale agreements dated 11 April 2024 (the “Stock Purchase Agreements“), for approximately 12 million Canadian dollars in cash (total “Transaction“) at the annual general meeting of shareholders and the extraordinary general meeting of shareholders held on 24 June 2024 (the “Meeting“).

Once the transaction is completed, Steppe Gold will be the largest primary gold producer in Mongolia.

The all-share transaction pursuant to the Share Exchange Agreement combines Steppe Gold’s ATO gold mine with its existing Boroo gold mine, with combined production expected to be in excess of 150,000 ounces of gold per year by 2026.

The transaction is subject to customary closing conditions, including receipt of certain regulatory approvals, including the approvals of the Toronto Stock Exchange and relevant Mongolian authorities. The transaction is expected to close on or about July 16, 2024.

The Transaction is expected to provide Steppe Gold with a number of benefits:

• Increased production: Total gold production is estimated to exceed 150,000 ounces per year by 2026. Boroo Gold contributes significant production, estimated at 431,000 ounces of gold between 2024 and 2031, with average forecast annual production in 2024, 2025 and 2026 of approximately 60,000 ounces.

• Financial assistance: Immediate and strong cash flow for Steppe Gold. In 2023, Boroo Gold had revenues of $132 million from production of 67,315 ounces of gold, with an average gold price achieved of $1,957 per ounce. Production in 2024 is expected to be at a similar level to 2023.

• Cost savings: The combined entity is expected to experience cost reductions through bulk purchasing and lower administrative expenses.

• Exploration potential: The transaction expands Steppe Gold’s exploration capabilities near its current mines, offering promising opportunities for future discoveries.

• Stronger focus: By divesting the Tres Cruces project, Steppe Gold can focus its resources on Mongolian assets.

The Company is also pleased to announce the positive results of the Meeting. The full voting results are available on the Company’s SEDAR+ profile at www.sedarplus.ca.

Transaction approval

The voting results on the resolution approving the Transaction are as follows:

For	%	Against	%
52 838 211	98.741%	673 982	1.259%

“We are extremely pleased with the overwhelming support our shareholders have given us for our proposed Transaction,” said Bataa Tumur-Ochir, President and CEO of Steppe Gold.

“This transaction positions Steppe Gold as a major force in Mongolia’s rapidly expanding gold sector. Upon completion of the transaction, we will be a multi-asset producer with solid cash flow, exciting exploration prospects and a team of talented professionals ready to drive our continued growth. Importantly, this transaction increases our optionality to finance the expansion of the ATO Phase 2 gold mine and potential future acquisitions throughout Mongolia.”

Qualified Persons

The technical content of this press release regarding Steppe Gold has been reviewed and approved by Enkhtuvshin Khishigsuren, Eng., a “qualified person” as that term is defined in National Instrument 43-101 – Disclosure Standards for Mining Projects.

Technical reports

Additional information regarding Steppe Gold’s Altan Tsagaan Ovoo Project, including its AuEq resource base, is contained in Steppe Gold’s technical report dated November 6, 2022 entitled “Altan Tsagaan Ovoo Project (ATO) 2022 Mineral Resources & Reserves Report (NI 43-101)”. A copy of that report may be obtained on SEDAR+ at www.sedarplus.ca.

Further information regarding the Tres Cruces Project is contained in Steppe Gold’s technical report dated August 21, 2023 entitled “Form 43-101F1 Technical Report Preliminary Economic Assessment.” A copy of this report can be obtained on SEDAR+ at www.sedarplus.ca.

Steppe Gold Sp. z o. o.

Steppe Gold is a leading Mongolian precious metals trading company.

For further information please contact:
Bataa Tumur-Ochir, President and CEO

Jeremy South, Senior Vice President and Chief Financial Officer

Shangri-La Office, Suite 1201, Olympic Street
19A, Sukhbaatar District 1,
Ulaanbaatar 14241, Mongolia
Phone: +976 7732 1914

Forward-looking statements

This press release contains certain statements that constitute “forward-looking statements” and “forward-looking information” within the meaning of applicable securities laws (collectively, “forward-looking statements”). These include statements regarding Steppe Gold’s intentions or beliefs or current expectations regarding Steppe Gold’s growth, production and pricing following the closing of the Transaction and future metals market conditions.

This press release uses words such as “anticipated,” “expected,” “estimated,” “future,” “forecast,” “likely,” “opportunity,” “current,” “potential,” “planned,” “projected,” “proposed,” “vision” and similar expressions to identify these forward-looking statements, as well as phrases or statements that certain actions, events or results “could,” “might,” “should,” “will” or “might” occur or the negative connotation of such terms.

In addition, forward-looking statements may relate to Steppe Gold’s future prospects and anticipated events, such as the completion and timing of the Transaction; satisfaction of the preconditions to the Transaction; anticipated benefits of the Transaction; potential value to Steppe Gold shareholders; anticipated closing date of the Transaction; timing and anticipated receipt of required regulatory approvals for the Transaction; anticipated gold production of Boroo Gold and cumulative gold production of Steppe Gold; anticipated cash flow of Steppe Gold; potential liquidity from the sale of the Tres Cruces Project; and discussions of future plans, projections, objectives, estimates and forecasts and related timing.

These forward-looking statements are subject to numerous risks and uncertainties, including: regulatory and stock exchange approvals; approvals by relevant Mongolian authorities; the exercise of termination rights under the Stock Exchange Agreement or the Stock Purchase Agreements; the satisfaction of other preconditions to each of the Stock Exchange Agreements and the Stock Purchase Agreements; material adverse effects on the operations, properties and assets of Steppe Gold or Boroo Gold; discrepancies between actual and estimated production and assay results, mineral reserves and resources and metallurgical recovery; and other risks more fully described from time to time in Steppe Gold’s public information documents, including, without limitation, the risks set forth in Steppe Gold’s Annual Information Form for the year ended December 31, 2023, which is available on SEDAR+ at www.sedarplus.ca.

Forward-looking statements are based on information available at the time they are made and/or the good faith belief of management at that time with respect to future events and are subject to risks and uncertainties that could cause actual results or outcomes to differ materially from those expressed or implied by such forward-looking statements. Forward-looking statements speak only as of the date they are made. Except as required by applicable law, Steppe Gold assumes no obligation to update or publicly release the results of any change to any forward-looking statement contained or incorporated by reference herein to reflect actual results, future events or developments, changes in assumptions or changes in other factors affecting the forward-looking statements. If Steppe Gold updates one or more forward-looking statements, there should be no inference that the company will make additional updates with respect to those or any other forward-looking statements. All forward-looking statements contained in this press release are expressly qualified in their entirety by this cautionary statement.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/215214